Canada says still examining options on CNOOC bid

OTTAWA (Reuters) - The Canadian government is still mulling its options as deadlines near on two proposed foreign takeovers of domestic energy companies, but an official offered no clues on when or how Ottawa would announce the hotly debated decisions.

Andrew MacDougall, spokesman for Prime Minister Stephen Harper, did not comment on a report that the federal government might want China's CNOOC to sell the 7 percent stake that takeover target Nexen Inc holds in the large Syncrude oil sands joint venture, because fellow Chinese company Sinopec Group has a 9 percent stake in it.

"The government is examining its options," he said by email.

The Conservative government is trying to balance the need for foreign investment to develop natural resources with concern that China and other countries could snap up a big chunk of the energy sector, and that state-owned firms might not play by free-market rules.

It faces a deadline of December 10 for deciding on whether to allow the $15.1 billion Nexen bid. A separate decision is pending on a bid by Malaysia's Petronas for Progress Energy Resources Corp, while Ottawa also promises to clarify its overall guidelines on foreign investment.

The CNOOC bid featured in the campaign for a parliamentary seat in the center of the oil city of Calgary. No decision came before a November 26 election there and in two other cities, as observers had predicted.

The report of possible conditions attached to the Nexen deal came from Business News Network anchor Howard Green, who also said his sources were saying that Harper's chief of staff, Nigel Wright, was likely the author of guidelines on Canada will deal with bids from state-owned enterprises like CNOOC.